Unless the Aggregate Supply Curve Is Vertical,decreases in Aggregate Demand

question 240

Multiple Choice

Unless the aggregate supply curve is vertical,decreases in aggregate demand tend to

• A)result in inflation.
• B)cause the interest rate to rise.
• C)result in increases in real output.
• D)result in decreases in GDP.
• E)cause unemployment to fall.

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Definitions:

Interest

Interest represents the cost of borrowing money, typically expressed as a percentage of the principal, paid by the borrower to the lender for the use of the lender's money.

Economic Profits

Economic profits are the total revenues of a firm minus the opportunity costs of all inputs, reflecting the additional gain over the normal profit.

Insurable Risks

Risks that meet certain criteria making them insurable, such as being definite, accidental, and potentially financially devastating to the insured.

Entrepreneur's Reward

The financial gain and intangible benefits an entrepreneur receives for taking on the risks and challenges of starting and managing a new business venture.